Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Venture Predation

papers.ssrn.com

Post reply on HN
Print view View original

221–230 of 231 posts

Re: Venture Predation

#221

Post by 93po »

junofan wrote: post #172
daveguy wrote: post #145

Earlier quoted context omitted.

> Diapers.com example: "When Bezos’s lieutenants learned of Wal-Mart’s counterbid, they ratcheted up the pressure, telling the Quidsi founders that [Bezos] was such a furious competitor that he would drive diaper prices to zero if they sold to Bentonville. How is this not a serious anti-competitive monopolistic practice? Did the Dept of Justice get involved?

Threatening to compete harder is anti-competitive?

It's anti-competitive but extremely American/capitalist. The whole premise of our economy is to leverage wealth and advantage to build more wealth and advantage until you're the wealthiest and most advantaged. That Bezos continued to do this is part for the course.

If we want true competition, we need a merit-based society instead of a wealth-based one.

Re: Venture Predation

#222

Post by 93po »

conjecTech wrote: post #43
brookst wrote: post #32

Earlier quoted context omitted.

Eh, there is alot more nuance here. Dumping is typically when an established company attacks a competitor with temporarily low prices. If you squint right, sure, VC backed low costs could be seen as dumping. But the problem is that also means virtually every startup is dumping, even bootstrapped garage efforts. And I guess any company that reports a quarterly loss is also dumping. So I think it probably makes sense t…

No, there isn't much nuance here. Accounting has notions of fixed costs and marginal costs. The startups you are referring almost all lose money on fixed costs, but sell things at per-unit economics which make sense at scale because they are below marginal cost/COGS. Things like Uber are a typical dumping cases. For years, they charged below their COGS and eventual profitability depended on driving out competition an…

> The startups you are referring almost all lose money on fixed costs, but sell things at per-unit economics which make sense at scale because they are below marginal cost/COGS.

Many startups and new projects operate with effectively zero revenue until critical mass, at which point they start charging. Youtube, Meetup, Reddit, G Suite, facebook, craigslist, twitter, linkedin. The list goes forever. These all started as free services without any meaningful revenue. I don't see any difference between these platforms and Uber, which while not free, is also selling below costs.

Re: Venture Predation

#223

Post by ttymck »

post-it wrote: post #143
boeingUH60 wrote: post #94

Earlier quoted context omitted.

Quidsi founder Marc Lore sold his next company, Jet.com, to Walmart for $3.3 billion [1]. Both Quidsi and Jet.com were never profitable, meaning Lore was also playing the game of venture predation, so hardly any pity from me. To add, Lore's current startup is a premium food delivery service called Wondery that raised $350 million at at $3.5bn valuation last year [2], and it's not profitable too. None of Lore's compan…

> Lore's current startup is a premium food delivery service called Wondery A brilliant strategy! Amazon already owns a Wondery[0] so they can't acquire his. [0] https://en.wikipedia.org/wiki/Wondery

Why can't they acquire it?

Re: Venture Predation

#224

Post by mcdonje »

MichaelZuo wrote: post #220
mcdonje wrote: post #218

Earlier quoted context omitted.

Most of what I said was not opinion, and your point here refutes none of mine. Appeal to authority fallacy, with maybe a bit of appeal to tradition mixed in.

> Most of what I said was not opinion, and your point here refutes none of mine. Appeal to authority fallacy, with maybe a bit of appeal to tradition mixed in. Huh? > A working toilet is an unmitigated good. Seems like an opinion, since 'unmitigated good' seems like an impossible thing to prove. Only one counterexample of plausible harm is needed. > Cars on the other hand have a much more questionable value propositi…

>Only one counterexample of plausible harm is needed.

Ok, where's your example of plausible harm for a working sanitation system?

>It's even phrased as an opinion.

That sentence is, sure. Weird how you left out the supporting examples.

>Sounds like an opinion too.

Why? Because of phrasing? Consider the repercussions of a city having transportation issues vs a city having sanitation issues. Nobody who knows anything on these subjects would say transportation is more important than sanitation.

It boggles the mind you think it's just an opinion that cars are as important as a working sanitation system.

How many cities have car free districts? How many cities have sanitation free districts?

Re: Venture Predation

#225

Post by spondylosaurus »

spaceman_2020 wrote: post #158
mdgrech23 wrote: post #116

Earlier quoted context omitted.

This is our world right now. My wifes father was a plumber. She said as actual plumber, you know someone who provides water and ensures your shity is sanitarily drained away he didn't make really good money. He got a job working for the auto industry running pipes for hydraulics to the machines on the factory floor and made way more money. How is that worth more to our society?

These startups aren't even making pipes in a factory. They're building absolutely dumb stuff that offer marginal life improvements ("15-minute delivery") or no improvements at all (crypto). Literally tens of billions have flowed into startups in just the above two categories. If both were to disappear from the face of the Earth tomorrow, you'd miss them for about 5 seconds.

Don't forget all the apps that do nothing!

Am amazing example I saw recently was a startup whose app supposedly helped you break your monthly rent payment into two smaller biweekly payments, except all it did was hold on to part of your midmonth paycheck until the end of the month so you couldn't spend it.

The best part is that was positioned as a way to help low-income people who suck at budgeting, but you had to pay $20/mo for the privilege of using it.

Re: Venture Predation

#226

Post by spondylosaurus »

revelio wrote: post #165
HDThoreaun wrote: post #110

Earlier quoted context omitted.

Chrome and vscode are integral parts of Google's and Microsoft's strategy and absolutely make them tons of money via increased usage of their main product(search and enterprise productivity suite).

How does VS Code increase usage of Office?

By "enterprise productivity suite" I assume they meant GitHub.

Re: Venture Predation

#227

Post by pyrale »

scotty79 wrote: post #215
pyrale wrote: post #174

Earlier quoted context omitted.

> Both Quidsi and Jet.com were never profitable, meaning Lore was also playing the game of venture predation I don't know about the books in this specific case, but losing money doesn't mean you're into venture predation. You could very well be losing money but also have sound unit-cost to price.

> You could very well be losing money but also have sound unit-cost to price. If you have that and still loose money then you are doing other things that get you ahead of your competition that need to sustain their operation with those prices. Either way you use somebody's money to cheat your competition.

> Either way you use somebody's money to cheat your competition.

That's the principle of investment.

The difference between using money to improve productivity, or make the product more appealing to the consumer, or whatnot, and price-dumping, is that investing is supposed to generate long-term returns, which can benefit the company or consumers. Price dumping, on the other hand, doesn't generate future returns. It generates costs that the consumer will have to repay later.

In the first situation, consumers may benefit from that competition. In the second situation, they inevitably end up losing.

Re: Venture Predation

#228

Post by junofan »

93po wrote: post #221
junofan wrote: post #172

Earlier quoted context omitted.

Threatening to compete harder is anti-competitive?

It's anti-competitive but extremely American/capitalist. The whole premise of our economy is to leverage wealth and advantage to build more wealth and advantage until you're the wealthiest and most advantaged. That Bezos continued to do this is part for the course. If we want true competition, we need a merit-based society instead of a wealth-based one.

I dunno. Bezos is pretty good at managing a company. A lot of people chose to bet on Jeff Bezos. He delivered phenomenal results for decades. I’m not seeing the societal failure.

Re: Venture Predation

#229

Post by 93po »

junofan wrote: post #228
93po wrote: post #221

Earlier quoted context omitted.

It's anti-competitive but extremely American/capitalist. The whole premise of our economy is to leverage wealth and advantage to build more wealth and advantage until you're the wealthiest and most advantaged. That Bezos continued to do this is part for the course. If we want true competition, we need a merit-based society instead of a wealth-based one.

I dunno. Bezos is pretty good at managing a company. A lot of people chose to bet on Jeff Bezos. He delivered phenomenal results for decades. I’m not seeing the societal failure.

The societal failure is the 1.5 million Amazon employees who work horrid conditions for not enough pay to support a family, housing, or healthcare. For the engineers who work at corporate and are underpaid due to salary collusion between tech companies. And the million other net-negatives for society that Amazon and every other billion dollar company has inflicted upon the planet.

Ultimately billionaires (capitalists) are profiting unfairly off the labor of others. This is obviously an unpopular opinion on a website promoting VC.

Re: Venture Predation

#230

Post by MichaelZuo »

mcdonje wrote: post #224
MichaelZuo wrote: post #220

Earlier quoted context omitted.

> Most of what I said was not opinion, and your point here refutes none of mine. Appeal to authority fallacy, with maybe a bit of appeal to tradition mixed in. Huh? > A working toilet is an unmitigated good. Seems like an opinion, since 'unmitigated good' seems like an impossible thing to prove. Only one counterexample of plausible harm is needed. > Cars on the other hand have a much more questionable value propositi…

>Only one counterexample of plausible harm is needed. Ok, where's your example of plausible harm for a working sanitation system? >It's even phrased as an opinion. That sentence is, sure. Weird how you left out the supporting examples. >Sounds like an opinion too. Why? Because of phrasing? Consider the repercussions of a city having transportation issues vs a city having sanitation issues. Nobody who knows anything o…

Toilets != sanitation

One plausible example of toilets causing harm is if it's a very poor rural area.

The existing outhouse works fine, spending money on getting a toilet and connecting it to running water would not be the wise choice as that money would have been better spent on other things first, such as sending the kids to school, buying them a uniform so they don't get bullied by the other kids, buying a solar panel plus a battery so they have some semi-stable electricity, etc...

i.e. it's impossible for it to be an unmitigated good in the real world, where there's resource scarcity and many uses of said resources.

So unless you have some credible proof otherwise, the default assumption for me and passing readers will be that they are opinions.

Post reply on HN